We set our target price at ¥388,000, applying a multiple of 22.2x (DPU yield of 4.5%, yield spread of 350bps) to the aggregate of our normalized DPU forecasts for FP5/11 and FP11/24. We forecast FP5/25 NAVPU of ¥462,900, so our target price equates to a NAV premium of -16.3%, as well as an implied cap rate of 3.64%.

Risks associated with the attainment of our target price include developments in the real estate investment market (i.e., premiums/discounts on the liquidity of asset holdings), the real estate leasing market, and the interest rate and credit markets. Our current assessment is that 1) the real estate investment market is flat, 2) rents at API’s portfolio properties are on trending downward, and 3) API’s debt-raising platform is stable and that the Japan monetary environment is easy. If the impact of any of these factors varies greatly from our expectations, the unit price may diverge from our target price.